“Pray,” Habitat Detroit urges as it restructures
Detroit — When Habitat for Humanity Detroit opened its doors in the early 80s, the focus was on empowering Detroiters and giving them a path to home ownership.
Fast forward 31 years and the American Dream seems to be fraying.
Habitat Detroit announced last month a “strategic restructuring” that included layoffs of most employees and closing both of its resale store locations. Organization officials have had little to say publicly beyond its initial statement emailed in January to the news media in which it asks volunteers and supporters to “pray.”
“We may be down, but we’re certainly not out,” Habitat Detroit said in the email. “At our core, we’re Detroiters and we come back. Habitat Detroit will do the same. Our vision is bigger than our circumstance.”
The organization also directed supporters to its website for donations.
Habitat Detroit outlined its troubles in the intial statement noting that when former Detroit City Council president and later mayor Ken Cockrel Jr. took over as executive director a year ago the non-profit had a delinquency rate on some 40 percent of its mortgages, along with empty houses in its 350-home portfolio.
The organization claims delinquency rates are down from when Cockrel started, but did not share the base line number or what it is now. In addition to those troubles, Habitat Detroit “has been hit hard by the loss of government funding and a decline in corporate sponsorships,” which forced it to “take a long hard look at the current business model.”
Cockrel declined to comment or provide details about the group’s plans citing what he said was a directive from the board of directors.
“It’s not productive for us, nor does it really advance our cause, to be discussing these issues every other day in the media. So there’s nothing I can share, and that’s a directive that comes from our board,” Cockrel.
Board member Clyde Lewers said the group’s two resale Restores — on Mack Avenue near Cadieux and Greenfield at Interstate 96 — are revenue generators but will close amid the cost-cutting. ReStores sell gently used home improvement goods at a lower cost than one might find them at big box home improvement stores.
Lewers said that Habitat is looking into refinancing its debt, but added he was surprised the ReStores would close.
“I thought the one on Greenfield could be kept,” he said. “It’s been a money maker, but (lately) it hasn’t done as well.”
How long the stores will stay closed is uncertain, as the initial statement on restructuring noted a new ReStore would open in the spring. Whether that would mean the return of an old ReStore or the creation of a new one, Lewers couldn’t say. Earlier in the month, Habitat hosted a liquidation sale at both locations.
Foreclosures of Habitat homes are rare, just two percent nationwide each year, said Sue Henderson, vice president of U.S. and Canada operations at Habitat for Humanity International, Habitat Detroit’s parent organization.
But she said “mortgage performance and any vacant property inventory vary from community to community, and are influenced by local economic conditions.”
Henderson said Habitat International “supports the difficult but necessary action” in Detroit, and has communicated with Habitat Detroit leadership, the parent group has no details on the local’s plans.
Vincent Tilford, executive director of Habitat Detroit before Cockrel, said “Habitat has a very tough model in city of Detroit.”
“When you build homes in tough areas, (it’s) hard to get people to want to live there,” Tilford said.
In addition to the city, Habitat Detroit’s portfolio extends to Hamtramck, Dearborn and Lincoln Park.
Homes sometimes cost more to build than Habitat can sell them for, Tilford said, and that’s accounting for the free labor Habitat counts on to build homes, including volunteers from the community and prospective homeowners building up “sweat equity” on their path ownership.
As part of their sweat equity work, soon-to-be homeowners can help build their house, another house in the network or volunteer at ReStores, said Henderson.
Payments from homes in the other communities subsidize the Detroit homes, Tilford said.
“There’s a place for Habitat,” Tilford said. “But it’s about what neighborhoods you build in.”